Alison Fearon from Switcheroo.ie provides cautionary advice on what to avoid when planning to purchase a property.
It’s an exciting time, yes. It’s a stressful time, definitely, but don’t make it more difficult for your self than you have to.
Most people are a little all over the place and need helping to get themselves organised and well dressed for a mortgage. We can help with all that so don’t worry, but there are a few things we want to highlight that we can’t unwind, and customers need to help themselves:
1. Significant purchases before or during your mortgage application process prior to completion.
Cars are the typical culprit. Buying a car with a loan or even in cash will impact your loan application on multiple levels and so is best avoided until your mortgage is drawdown. Get the car after you have secured your dream property.
2. Changing jobs before you complete can kill the deal.
Banks will normally have to see at least two full payslips from your new employer, and that is banking on their being no probationary period. You will not get approved in most circumstances while on probation. Your Offer may expire while waiting on this probationary period to end and a new application can be required. Check with your intermediary how changing jobs will affect your mortgage application before doing so. We know changing jobs is a big deal, but timing is everything.
3. Don’t wait to gather your documents.
Nearly all sellers will require a preapproval letter with their offer to ensure they are working with a qualified buyer. In today’s competitive market, if the seller has to wait for you to contact a mortgage company to obtain a preapproval letter, they may move on and accept another offer. With the volumes the banks are receiving, it is important to be prepared.
4. Avoid applying to multiple lenders unless required.
Each time you apply for a mortgage the lender will run a credit check on you. Multiple credit checks over a short period is a bad signal. Work with your mortgage intermediary to identify who is the right lender for you.
5. Don’t always use your savings to pay off existing debt before checking with your broker or lender.
These savings can sometimes be better used towards a deposit etc. and in some cases your existing debt can be consolidated in your new mortgage at a lower rate.
It’s a challenging time so contact your mortgage advisor @Switcheroo.ie and get the right advice.
Alison Fearon is Managing Director of Switcheroo.ie
Panda capital Limited T/A Switcheroo is regulated by the Central Bank of Ireland.
